Devro Share Discussion Threads

[woodcutter] 29/4/2014 11:30

i thought it had plenty of thread related matter and a little light hearted footy thrown in for free. I guess that's a slap on the wrists then..........gal:-)

WC

[simon gordon] 29/4/2014 09:15

Sorry Sir....Yawn....

[dr_smith] 29/4/2014 09:10

Hi Guys,
Checking 'new messages' for thread to find it has no thread subject related matter detracts from the forum. Messages can be sent direct to each other or start a footy thread. :-)

[simon gordon] 28/4/2014 21:20

Woody,

I quite like Moanrinho.

Getting the kit guy to give the team talk at Man City was hysterical.

Flying his Yorkshire Terrier out of London in a private jet to Portugal so that it wouldn't be impounded.

I thought Chelski looked fantastic when the beat the Mouse at Stamford Bridge. With a top striker I think he'll play more expansive football next season, the team has good power and pace, with a blend of youth and maturity.

Manure were mad to not take him as manager.

Fantastic season, looking forward to Madrid / Munich tomorrow.

[laterunner] 28/4/2014 20:35

Phil

If the dividend were to be suspended then you wouldn't need any third profit warning. Still, I'm holding as DVO seem to be doing well in wealthier markets - some emerging markets will be along later I guess.

[phil140158] 28/4/2014 15:09

Woody - I'm still holding, but it looks a long way back from here. No mention of the dividend. Might add after the third profit warning!

[woodcutter] 28/4/2014 13:34

EI i figure the capex spend is more to do with land grab particularly in the far east. With what looks like a 30+% share of the market i think they're in a pretty strong position myself but you could be right it's not without risk, i guess it depends on your time horizons.

DVO's market looks to be gaining traction and will continue to grow, particularly in the far east.

all stocks are a risk i guess as is forecasting but longer term i figure DVO will deliver.

Woody

[essentialinvestor] 28/4/2014 13:17

They also need to take a more prudent view of their CAPEX commitments imv,
phase in over 4 years rather than 2.

It's only for the brave until there is some tangible sign of better news flow imv.

[deanowls] 28/4/2014 13:08

Eh woody weren't Liverpool one of the reasons the back pass rule was introduced?

From a neutrals perspective I found yesterday's game brilliant, Liverpool have been terrific all season, but as a defender myself with very little skill I have always had to rely on size, strength and speed, I reckon I could slot right into that chelski team but at 38 maybe a stretch too far!

[woodcutter] 28/4/2014 10:46

very droll;-)

DVO is not a problem if you consider the market share and cashflow this will just be a blip in what i expect will be a longer term growth story. I haven't added today nor sold either. I will wait for it to settle and then pick up a few more. It may hold here or drop a little further but i'm building here so it's very long term this one.

The mouse tactics were all wrong. Typical maureen but that's what i, and i guess just about everyone else expected. Even Rogers shouldn't have been surprised.

What he should have done was with no score after 20 minutes just sit back and keep possession ten yards inside our own half. They had to win we only needed a draw. If we'd have done that evetually they would have to have come out and try and take possession. Instead of them frustrating us they would've been frustrated and we'd have been able to hit them on the break.

Rogers was naive and his tactical inexperience showed yesterday. Instead of getting frustrated by their time wasting tactics we should've commended it and done the same, that would've made maureen aware that he needed to do something if he wanted to win the game.

On a wider note i've been saying for years that something needs to be done about the style of play that managers like maureen are advocating. Alladyce is another example, sit back hoof it long and hope for an error. And look what the westham fans think of him. They've a tradition of playing entertaining football and want to see it upheld regardless of what division they're in.

Maureen might not always be long ball but the principles are the same, sit back and break with pace and power or wait for a mistake.

They had similar problems in rugby and chose to change the rules to give bonus points for more tries, four or more i think gets a bonus point. I would give an extra point for 3 goals or more.

If you consider that then maureen would be well behind lfc and mc at present. Currently we're in effect rewarding boring football. They'll do exactly the same at home against athletico.

There needs to be more incentive to attack anyone can put nine men in the box and hope for a break or mistake, you don't need an expensive coach for that.

hopefully they'll get a taste of their own medicine at home to norwich next week and at cardiff the week after. It's not over but we need everton to do us a favour next week, probably not the side we'd most like to be seeking support from but beggars can't be choosers.

Life moves on!!!

Woody

[simon gordon] 28/4/2014 09:57

Commiserations Woody.

What's worse, this fall or Chelski beating the Scouse Mouse two nil?

My thoughts are with you at this difficult time :-)

[woodcutter] 28/4/2014 09:50

The management statement released today is only marginally different from that outlook statement released with the last results. Indeed much of the statement is similar if you read between the lines on the last results.

So there's a little confidence lost and a little more uncertainty hence the drop in share price but longer term and perhaps more importantly the growth plans for new manufacturing plant and the phasing out of older plant seem on track.

I figure we may need to go one step back to stride three steps forward on the share price

aimho

WC

[woodcutter] 28/4/2014 09:17

not the best news!

Still if you're in for the longer term then it's an opportunity to add.

WC

[salpara111] 28/4/2014 08:13

Didnt expect another profit warning but I guess they say that they come in threes so only one more to go!
Moved the stock to my low level monitor list but dont think that it will be worth a punt for another 6-12 months.

[woodcutter] 28/3/2014 17:25

have we seen the bottom?

Full engulfing candle today. 220p'ish has historically been a potential support level.

WC

[woodcutter] 27/3/2014 16:12

added this pm.

The business will most likely be slower this coming year but i expect it to grow much quicker in the following years as the new, more efficient, production units come on line, and we see consumer growth in the developing world.

WC

[salpara111] 27/3/2014 12:04

I owned this one last year and managed to get out with a few percent gain.
I sold due to the fact that their business seemed to be slowing considerably and they were suffering currency headwinds.
I can see this as a low growth divi play but only when the yield crosses the 4% line which is not far away now.

[woodcutter] 26/3/2014 11:04

if i'm understanding it correctly they completed the czech expansion programme and paid for it from the cash they generated from operations plus some borrowing.

cash generated from operations £43m and that's with an increase of £13m of inventory
capex spend £36m
net debt/EBITDA ..................0.6
roce 17.6%

borrowing increased by £10m+ but pension liabilities reduced by a similar amount. I don't see a problem here.

okay so they had very little cash to show for it after the year end but with that level of cash generation a few years of lower profits and possible stagnant share price is going to be worth the wait in the long run. I guess you could hold fire and wait for the share price to rise but i figure it'll be too late then there's not a lot of shares in issue and it's pretty tightly held.

the pricing power can be seen in the margins too, operating profit margin of over 17%. how many food producers can deliver that kind of margin.

i may have jumped the gun but will be glad to buy on further weakness.

Woody

[woodcutter] 26/3/2014 10:49

well there's both the net debt and the pension debt to consider. But there were similar problems at FIF a few years ago, high net debt but exceptional cash flow. Nobody was interested in it when it was 20p but i just kept adding and tripled my money after building up a sizeable stake. There's no question there's risk attached but i figure the strong cashflow and ability to service the debt is favourable imv.

There's always the possible downside of a share placement to strengthen the balance sheet. FIF were paying down £2/4m a year of debt and then sold a subsidary and had a small placing to strengthen their BS from memory but by then the share price was already on the move. I don't hold anymore!

So yes, some risk but also potential upside is considerable as the debt is paid down and the eps increases exponentially. I'd even prefer a divi reduction to get the debt down, in the long run it will be beneficial. yes that might affect the share price but if your willing to be patient and build a stake then i'd hope it would turn out okay.

WC

[essentialinvestor] 26/3/2014 09:51

It's the planned CAPEX that the market did not like imv.
Where is that going to leave net debt?.

[simon gordon] 26/3/2014 09:47

Woody,

I agree with your points on the future but in the present it's being de-rated until that future actualises more clearly.

Next trading update in June and interims late July.

Wonder where the share will bottom out, 230p to 250p, or, 230p to 200p?

Consenus EPS:

2014 - 18.59p

2015 - 19.91p

[woodcutter] 26/3/2014 09:25

While there are clearly problems with destocking and the high inventories and the slowing of growth in the developed world the growth in the new economies will more than make up for this over time. They are committing to significant capex over the coming years which will drive efficiencies. You don't commit this level of capex without some certainty that it will deliver the growth.

If i recall from the last results they mentioned that at current exchange rates the profit would have been £5m less but the efficiency saving from new plant would be £8m when it's on line. Exchange rate difference are swings and roundabouts, at some time in the future the reverse will be the case.

More important than any of this is the global market value which was reported as £650 million annually, DVO revenue £243 million that's over a third of the market. My reading of this is with that level of market share they can retain pricing power regardless of raw material costs and customer pressure.

imv this is a good time to build a stake, take the dividends, whilst the price is depressed and wait for the share price to rise. World population is growing and food needs will expand. That's my long term view.

I've begun to build a core part of my portfolio now around food producers and animal feed additives suppliers which i hope will be very profitable over the coming years.

aimho

Woody

[el chupacabra] 24/3/2014 19:19

it will be to late then... DVO will be at an all time high, Brokers will be upgrading, guests on CNBC will be raving and it will be time to go short :)